China's move to ** U.S. bonds for seven consecutive months has attracted widespread attention in the international market. According to data released by the U.S. Treasury Department, China's holdings of U.S. bonds in October were $769.6 billion, compared with $8.5 billion in September, the lowest level in 14 years. As the main external debt of the United States, the trend of U.S. debt has raised concerns about the global financial market.
On the one hand, China's successive moves to win US bonds reflect China's search to diversify its investments and reduce its dependence on US Treasury bonds. On the other hand, it also shows that China is willing to exert a certain amount of economic pressure through US debt. China's move is seen as a form of dissatisfaction with U.S. economic policy and a form of economic sanctions against the United States.
However, behind China's successive US bonds, it is more of a signal that China is accelerating the process of RMB internationalization. Represented by the Belt and Road Initiative, China is bringing new increments by building a global financial system. The practice of local currency settlement in China, Russia and other countries provides early experience for the RMB to become a regional and global settlement currency. China's RMB internationalization strategy aims to reduce China's dependence on the US dollar and enhance the status and influence of the RMB by expanding its international use.
China's first measures are implemented through a variety of means, one of which is to increase investment in strategic industries and further consolidate China's position in the global industrial chain. China has made impressive progress in photovoltaics, electric vehicles, aerospace engineering, chips, and other areas, making it difficult for the United States to compete with China in these areas. China's state-owned enterprises also have certain advantages in terms of financial penetration, and the US sanctions against China cannot deal a substantial blow to Chinese enterprises. Huawei, as a private enterprise in China, has demonstrated its ability to resist in the face of US sanctions, and it is also a key factor in China's victory in the economic war.
In the face of China's continuous U.S. debt, Yellen has expressed her willingness to visit China and clearly asked China to adjust its economic policy. Yellen hopes to establish a conflict-avoidance and runaway mechanism with China similar to the military field to maintain stability in the financial sector of China and the United States. This move not only reflects the U.S. concern about China's U.S. debt behavior, but also highlights the importance of financial cooperation between China and the United States for both sides.
As far as China is concerned, adjusting its economic policy is not an overnight matter, but a systematic project. China needs to invest time and energy in building an economic, financial, security, and technological system with China at its core. Until then, the dollar's status as the world's main reserve currency will not be easily shaken, so China will still need time to deal with dollar-denominated assets. However, there are some problems with the dollar system itself, especially the challenge of US national power. The withering of manpower due to overindulgence has left the United States with a lack of basic support for its economic, technological, and military systems. Therefore, the United States needs to seek to maintain a stable relationship with China to prevent a sudden collapse of China's dollar system.
Yellen's demands involve China's economic policy adjustment and reduction of the share of state-owned enterprises in the economy. China's five-year economic plan, which is committed to sustained and focused investment in strategic areas, has achieved progress that is difficult for the United States to achieve. China's rapid development momentum in photovoltaics, electric vehicles and other fields makes the United States face greater challenges in the economic struggle with China. In addition, China's state-owned enterprises also have advantages in terms of financial penetration, which poses a certain threat to the United States.
China's successive U.S. debt moves are an important part of the internationalization process of the Chinese people's currency. China is accelerating the internationalization of the renminbi and strengthening its position as a global reserve currency. By promoting the Belt and Road Initiative, China hopes to become the center of the global economy through its own development. The internationalization of the renminbi is of great significance to China, on the one hand, it can reduce China's dependence on the US dollar, alleviate the risk of continuous growth of China's national debt, and on the other hand, it can also provide China with more development opportunities and international discourse.
At present, China has adopted a series of domestic policies and measures to promote the internationalization of the renminbi, such as actively expanding the international use of the renminbi, promoting the wider use of the renminbi in the global market, and strengthening financial cooperation with other countries. In the future, China also needs to further deepen financial reform, increase financial opening-up, and improve the transparency and competitiveness of its financial market. At the same time, China also needs to strengthen cooperation with other countries and actively participate in the reform and construction of the international financial governance system.
In the process of internationalizing the renminbi, China needs to overcome a series of challenges and difficulties. First, China needs to further enhance the international trust and market recognition of the renminbi. Second, China needs to strengthen financial supervision and risk prevention to avoid financial risks that adversely affect the process of RMB internationalization. Finally, China also needs to strengthen the stability and sustainability of the renminbi exchange rate and improve the safety and stability of the renminbi as a reserve currency.
Behind China's successive moves to ** US bonds and the US ** Yellen's visit to China to demand that China adjust its policies, it reflects the game and competition between China and the United States in the economic field. China is speeding up the internationalization of the renminbi, reducing its dependence on the US dollar through various means, and enhancing the status and influence of the renminbi. However, the road to RMB internationalization is not smooth, and China needs to overcome a series of challenges and difficulties. By deepening financial reforms, opening up the financial sector to the outside world, and improving the international use and market recognition of the renminbi, China is expected to achieve the goal of internationalizing the renminbi, but this will only require cooperation and joint efforts with other countries. By strengthening financial supervision and risk prevention, and improving the stability and sustainability of the renminbi, China can lay a more solid foundation for the internationalization of the renminbi.
Financial cooperation is an important aspect of the U.S.-China economic relationship. Both China and the United States have certain rigid needs to maintain stable financial relations. As a global financial hegemon, the United States needs to provide China with a stable financial environment to prevent China's sudden actions from threatening the dollar system. China, on the other hand, needs to accelerate the construction of China's economic, financial, security, and scientific and technological systems, reduce its dependence on the US dollar, and enhance its economic strength and international influence.
Overall, China's successive U.S. bonds and Yellen's visit to China and her demand for China to adjust its policies reflect the economic game between China and the United States. China is accelerating the internationalization of the renminbi and enhancing its status and influence by reducing its dependence on the US dollar. However, the road to RMB internationalization is not smooth, and China needs to overcome a series of challenges and difficulties. By strengthening financial reform, opening up the financial sector to the outside world, and improving the international trust and market recognition of the renminbi, China is expected to achieve the goal of internationalizing the renminbi and bring new changes to the global financial system.